Name: FATIN NUR SYAFIEQA BINTI A RAZAK Date 7 December 2023

Q1 Prepare a personal balance sheet for Ahmad.

Personal Balance Sheet

ASSETS
Liquid assets
✔ Saving account RM1,000
Total liquid assets RM1,000

Household & Possessions Assets

✔ Furniture RM2,000
✔ car RM12,000
Total household assets RM14,000

Investment Assets
✔ stock RM2,000
Total investment assets RM2,000
TOTAL ASSETS RM17,000

LIABILITIES
Current Liabilities
✔ credit card balance RM9,000
Total current liabilities RM9,000

Long-Term Liabilities
✔ car loan balances RM10,000
Total long-term liabilities RM10,000
TOTAL LIABILITIES RM19,000

NET WORTH -RM2,000

Q2 Determine his Net Worth Value and comment on the value.

✔ Ahmad's Personal Balance Sheet reflects a negative net worth oh RM2,000.

This indices that a significant strain and a state of diminished wealth, as his total
liabilities surpass the value of his total assets.
Q3 Suggest TWO ways on how to improve Ahmad's Net Worth Value.

✔ 1. Ahmad can improve his net worth by implementing a focused strategy to reduce
and eliminate outstanding debts, starting with high-interest obligations.

2. To enhance Ahmad's financial health, he should actively accumulate appreciating

assets through strategic investments, potentially diversifying income sources for
long-term growth.

Q4 Prepare a personal cash flow statement for Ahmad.

Personal Cash Flow Statement

CASH INFLOWS
✔ Salary RM4,000

Total Cash Inflows RM4,000

CASH OUTFLOWS
✔ Rent RM2,000
✔ Maintenance RM400
✔ credit card RM100
✔ utilities RM200
✔ grocery RM500
✔ smartphone RM200
✔ gym membership RM170
✔ entertainment RM700
✔ Car instalment RM700
Total Cash Outflows RM4,970

Surplus/Deficit (IN - OUT) -RM970

Q5 Based on these statements, assess Ahmad current financial situation.

✔ Ahmad's current financial situation is challenging as his cashflow is deficit

because of his cash outflow exceeds his cash inflow. This deficit of RM970
indicates that Ahmad is spending more money than he is earning, leading to
potential financial strain.

Q6 Provide recommendations to help Ahmad make some adjustments on

the statements so that he can maintain a positive cash flow for the next
month.

✔ Ahmad can achieve a positive cash flow for the next month by making a
strategic adjustments to his financial statement such as reduce his expenses.
Ahmad should carefully review his expenses and identify areas where he can cut
back. Trimming discretionary spending and prioritizing essential expenses can
create room for a more positive cash flow.

Other than that, Ahmad also can exploring additional sources of income, such as
a part-time job, freelance work, or a side business that can contribute positively to
Ahmad's cash flow. Identifying opportunities to boost his overall income is a key to
achieve a surplus.

Lastly, Ahmad also can implementing a well-defined budget and financial plan
will help Ahmad allocate his fund more efficiently. Setting spending limits, saving
goals, and having a clear understanding of his financial prioritize will contribute to a
healthier cash flow.
Name: FATIN NUR SYAFIEQA BINTI A RAZAK Date: 7 December 2023

Ahmad - A Continuing Case Study

to apply knowledge of financial planning and management skills to deal with
limited resources and solve money-related problems. (C3, PLO2)

Q7 Based on Ahmad's narative, create any possible financial goals by using

the SMART frameworks. Evaluate the priority, importance and timeliness
of each of the goals by putting the goals under the most appropriate
category.

SHORT TERM GOAL (less than one year)

✔ Financial Goal: Savings Account
S: Ahmad aims to save RM1,500 within the next three months. This specific amount is
earmarked for building an emergency fund.

M: Ahmad will track his progress by setting aside RM500 each month. At the end of
each month, he will review his savings account balance to ensure he is on track.

A: Considering his current financial situation, Ahmad believes that setting aside
RM500 per month is realistic without compromising his essential expenses.

R: The goal is relevant to Ahmad's financial well-being as it is established a financial

safety net, providing a cushion for unexpected event.

T: Ahmad has set a specific time frame of three months to achieve this goals. This
timeframe adds a sense of urgency and helps him stay focused on consistent savings
over the short term.

INTERMEDIATE TERM GOAL(S) (2 to 5 years)

✔ Financial Goal: Education
S: Ahmad aims to save RM5,000 within the next 12 months to cover his tuition fees for
an intermediate term professional certification in program in Technology Analysis.

M: Ahmad will set aside RM417 per month for the next 12 months, tracking his
progress regularly to ensure he reaches the target of RM5,000 by the end of the
specific period.

A: Given Ahmad's current monthly budget and potential additional income sources,
allocating RM417 monthly towards his education fund is realistic and attainable without
compromising his othe financial obligations.

R: Pursuing a professional certification in technology analysis aligns with Ahmad's

career and enhancing his skills set, making it a relevant investment in his education.

T: Ahmad has set a specific time-frame of 12 months to achieve this financial goals,
providing a clear deadline for saving the required amount before enrolling in the
certification program.
 LONG TERM GOAL(S) (More than 5 years)
✔ Financial Goal: Savings For Retirement
S: Ahmad aims to accumulate RM300,000 in a dedicated retirement savings fund.

M: He will contribute RM1,000 per month to his retirement fund, with regular
assessments to track progress toward the RM300,000 goals.

A: Given Ahmad's current income and expenses, allocating RM1,000 monthly for
retirement savings is realistic while still meeting his other financial obligations.

R: Saving for retirement aligns with Ahmad's long-term financial security ane ensures
he can maintain a comfortable lifestyle in his later years.

T: Ahmad plans to achieve this goals in 25 years, providing a clear time frame for
regular assessments and adjustments to stay on track.
Name: FATIN NUR SYAFIEQA BINTI A RAZAK Date: 7 December 2023

Ahmad - A Continuing Case Study

to apply knowledge of financial planning and management skills to deal with
limited resources and solve money-related problems. (C3, PLO2)

TAX RELIEF TAX RATE

Q8 Complete Tax Self Assesment below to know how much Ahmad should pay
for the income tax.

Income before Deductions

Gross Income RM4,000 x 12
Gross Annual Income RM48,000

Tax Deductions
Self Tax Relief RM9,000 ✔
EPF contributions RM48,000 x 11% RM5,280 ✔
Lifestyle Purchases RM2,500 ✔
📖 Books RM400
󰙣 Gym membership RM2,500
📲 Internet Subscription RM1,800
Total Tax Deductions RM16,780

Taxable Income RM31,220

Calculate the total amount of taxes based on the taxable income.

Click the button provided above to refer the Tax Rate for Assessment Year 2022

On the first RM 20,000 RM150 ✔

Next RM 11,220 * 3% RM337 ✔
Total Taxes RM487
Name:
FATIN NUR SYAFIEQA BINTI A RAZAK Date: 7 December 2023

Ahmad - A Continuing Case Study

to apply knowledge of financial planning and management skills to
deal with limited resources and solve money-related problems. (C3,
PLO2)
Q9 Use housing loan calculator, find monthly repayment amount that
Ahmad will have to commit if he decides to take the loan.

Deposit = RM 50,000
Housing loan = RM400,000
Interest rate = 4.4%
Tenure = 30 years
✔

Q10
Assess Ahmad's current credit capacity by calculating his DSR.
Comment on the DSR and determine whether Ahmad is still have
sufficient capacity to make the housing loan if the lender's
threshold is 70%?

Monthly Gross Income (b) ÷ (a) x 100%

Salary ✔ RM4,000 DSR = 21%
Freelancing RM700 comment: Ahmad ✔
Total Income (a) RM4,700 DSR of 21%
suggest that,
Monthly Debt Servicing based on the
Credit Card ✔ RM100 numerical
Car Loan ✔ RM700 threshold, he has
*PTPTN Loan ✔ RM201 sufficient capacity
to take a housing
(amount=RM23,000; 10 years repayment period; 1% interest
rate) loan.
Total Debt Servicing (b) RM1,001
*use the calculator provided above

Q11 Advise Ahmad how he can he increase his DSR?

✔ Ahmad can take several steps to increase his Debt Service Ratio (DSR) by
exploring opportunities to boost his income, such as negotiating a salary increase,
taking on additional freelance work, or pursuing supplementary income streams.

Other than that, Ahmad also can prioritizing the repayment of outstanding debts
that can helps to reduce monthly obligations and improving DSR. Ahmad should
focus on paying down high-interest debt first to optimize this strategy.
Name: FATIN NUR SYAFIEQA BINTI A RAZAK Date: 7 December 2023

Ahmad - A Continuing Case Study

to apply knowledge of financial planning and management skills to deal
with limited resources and solve money-related problems. (C3, PLO2)

Q12 Do you think Ahmad needs life insurance? If yes, why? If no, why
not?
✔ Yes, Ahmad might need life insurance because if Ahmad has outstanding
debt, a life insurance policy can prevent his loved ones from inheriting
financial burdens. It can also be used to pay off mortgages, loans, or other
obligations. Beside that, life insurance can serve as income replacement,
ensuring that Ahmad's family maintains their standard of living if he is no
longer there to provide financial support.

Q13 What type of policy will suit Ahmad’s needs and explain the
premium and the coverage of the policy.

✔ Based on Ahmad's financial situation and needs, the most suitable policy
is term life insurance. Premiums in term life insurance typically has lower
premium compared to other types of life insurance. Premium are paid for a
specific term, usually 10,20, or 30 years. The coverage of the term life
insurance provides a death benefit if Ahmad passes away during the policy
term. It offers pure life insurance coverage policy expires, and there is no
payout.
Q14 Explain to Ahmad the tax benefit that he can get if he purchase
the insurance policy.
✔ The tax benefits associated with life insurance can be vary based on the
types of policy and local tax regulations. Here are the potential tax
advantages that Ahmad can consider. The first one is Tax-Free death
benefit. The primary tax benefit of life insurance is the tax-free death benefit.
If Ahmad passes away while the policy is still in force, the proceeds paid to
his beneficiaries are typically not subject to income tax. This can provide
financial support to his loved ones without tax implications.

Other than that, life insurance can play a strategic role in estate planning.
The death benefit can be used to cover potential estate taxes, ensuring that
Ahmad's heirs receive the intended inheritance without significant tax
burdens.
 Name: FATIN NUR SYAFIEQA BINTI A RAZAK Date: 7 December 2023

Ahmad - A Continuing Case Study

to apply knowledge of financial planning and management skills to deal with
limited resources and solve money-related problems. (C3, PLO2)

Q15 Drag and drop any TWO investment vehicles that you want to
recommend to Ahmad.

Q16 Justify on the investing recommendation you have made above.

✔ Bonds often pay regular interest, providing a stable income stream. This
can be advantages for Ahmad, particulary if he seeks for consistent returns or
desires a sources of income in addition to potential capital appreciation from
stocks.

For stocks, it has historically demonstrated the potential for higher long-
term returns compared to bonds. By including stocks in his portfolio, Ahmad
positions himself to benefit from capital appreciation and the growth potential
of well-performing companies.

Congratulation! your financial journey with Ahmad ends here! For your final task,
please write your reflection summary below (not more than 300 words)

✔ Ahmad's case emphasized key financial planning principles, such as goal setting, risk
assessment, and budgeting. The recommendation to diversify his investment portfolio with
bonds and stocks aligned with his risk tolerance and financial objectives. Exploring life
insurance highlighted its tax benefits and strategic roles. Analyzing Ahmad's debt Service
Ratio (DSR) provided insights into his loan capacity, while cash flow management and
long-term goal setting underscored the importance of a holistic financial strategy. Overall,
Ahmad's case illustrated the interconnected nature of financial decisions and the need for a
well-rounded approach to achieve lasting financial well-being.